Herkimer Co. wants extra sales tax funds to continue

Herkimer County will again petition the state Legislature so it can continue to collect extra sales tax for Medicaid and the construction of a new jail. The county’s combined state and local sales tax rate is 8.25 percent, which includes the four percent state tax and the 4.25 percent local tax. Of the 4.25...

By Rob Juteau

The Times

By Rob Juteau

Posted Apr. 5, 2013 at 12:01 AM
Updated Apr 5, 2013 at 5:00 AM

By Rob Juteau

Posted Apr. 5, 2013 at 12:01 AM
Updated Apr 5, 2013 at 5:00 AM

Herkimer, N.Y.

Herkimer County will again petition the state Legislature so it can continue to collect extra sales tax for Medicaid and the construction of a new jail.

The county’s combined state and local sales tax rate is 8.25 percent, which includes the four percent state tax and the 4.25 percent local tax. Of the 4.25 percent, one percentage point is for Medicaid costs and a quarter of a percentage point is for the proposed jail.

County lawmakers passed a resolution Wednesday afternoon to ask the state Legislature to continue to impose the additional 1.25 percent sales tax.

The resolution passed by a 12-3 vote, with two absentees. Legislators John Brezinski, D-Frankfort, Gary Hartman, D-Herkimer, and Helen Rose, D-Herkimer, cast the no votes.

The county has been retaining the percentage point to cover Medicaid costs since 2006 and the quarter percentage point for expenses associated with the jail project since 2007.

Counties must renew sales tax requests with the state Legislature every two years.

A motion made by Rose and seconded by Hartman requesting to separate the resolution into two votes, one for the one percent tax and one for the quarter percent tax, was defeated 11-4. Legislator Dennis Korce, R-Mohawk, voted with Brezinski, Hartman and Rose to separate the resolution into two votes and said the extra quarter percent takes $4,600 a day, roughly $1.5 million a year, out of the local economy.

“That’s an awful lot of money,” he said, adding he was “80 percent” behind the resolution because he believes the extra percent retained for Medicaid is beneficial. “Withholding the extra percent has stabilized the tax rate and is a fair way of paying for Medicaid. If the extra percent was not retained, the county would have to make it up.”

Legislature Chairman Vincent Bono said withholding the extra sales tax lessens the burden placed on county taxpayers. “Withholding the sales tax is a fair way of paying for Medicaid and the jail because it does not place the burden solely on the taxpayers or on county residents. By withholding the sales tax people from outside Herkimer County are contributing to these costs,” he said. “Their purchases help our taxpayers.”

Hartman said he would like to see the extra quarter percent returned to the communities.

“The return of the extra quarter percent would provide a boost to the local economy,” he said. “I believe the revenue should benefit the business owners who generate it and the towns and villages that provide services to them.”

Legislator Robert Schrader, R-Herkimer, agreed with Hartman.

“I hope when the jail issue has been resolved the quarter percent is returned to the towns and villages,” he said. “It would help their budgets and their taxpayers.”

The county remains in litigation with the village of Herkimer over access to sewer and municipal services at the proposed jail site at the former P&C Foods on state Route 28.

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The county also had been litigation over an ordinance restricting construction of correctional facilities and jails in the village. Last August, however, State Supreme Justice Erin Gall ruled any ordinance that restricts such facilities at a state-approved location within the village was “null and void.”

The county has been pursuing plans to build a new jail at a cost between $33 million and $34 million. The new jail would house 130 inmates, County Administrator James Wallace has said, and after a year, would be able to double bunk up to 154.

Bono said Wednesday he believes the size of the jail is “on target.”

“With the number of inmates recently, I believe the 130 beds is a good projection,” he said. “But that’s just this legislator’s opinion.”

He added the county has already set aside more than $12 million for the proposed jail, which includes tobacco settlement money in addition to the sales tax.